On buying property in Spain, you should be mindful the title is clean. It is fairly common the previous owner is in arrears. In Spain, debts follow the property not the debtor. Meaning, when you take over the ownership, you also take on all the existing debts from the previous owner. This is why you should hire a conveyance law firm - like us - to carry out a thorough due diligence on the property ensuring everything is above board.
- Tenants. On buying property, the new owner takes on the position of landlord and must respect - by law - the duration of a pre-existing rental agreement. You should know some rental agreements in Spain lock you in for ten years… and you cannot update the rental.
- Utility invoices (water, electricity, etc). Outstanding utility invoices are a nuisance as utility companies may shut down the supplies. Reconnecting the electric supply, for example, can set you back 500 euros and you need to wait at least 4 weeks to top it off.
- Community of Owners. Properties within a community can be in arrears. The new owner takes on all the debts dating back five years, which can be substantial.
- Local taxes. The property can be in arrears with taxes levied by the local town hall. In the worst case, the property can be impounded and sold off in a public auction to recoup the debt. The new owner is held liable for all taxes going back four years.
- Title. It is important to acquire a clean title. Mortgages, embargoes, liens, etc can weigh down on a property’s value.
- Banned holiday rentals. A new trend is developing in community of owners, whereby they agree to ban holiday rentals outright. There is no point investing in a nice beach pad if you are not allowed to rent it out. It goes without saying that a property which cannot be leased legally has a substantially reduced market values as opposed to other similar properties in the area which can.
I have only listed the basic six, but you should be aware there are far more points to look out for. Which is why we strongly urge you to contact an experienced law firm like ours on buying property in Spain.
Cheap property for sale at auction in Spain
Property auctions in Spain can be an exciting and potentially lucrative way to purchase real estate. Buying property at auction allows you to get your hands on a house in Spain for considerably less than the market value. These types of properties come mostly from bank assets, but there are also individuals who opt for this type of formula to sell their home. Some may be in good condition while others may require renovation.
What expenses and taxes are paid when buying a second home in Spain?
Second homes are a significant part of the Spanish real estate market. Many people buy a second home as an investment, to have somewhere to relax or as an alternative to their main residence.
Aedas: "Tenerife new on-trend residential destination for foreigners"
The developer sold more than 600 homes to international clients last year, 13% more than the year before. Although the Costa del Sol and Levante are the most in-demand areas with the most transactions, Aedas assures that Tenerife South has made its way as a new on-trend residential destination for foreign buyers, after capturing 6.4% of its operations. It is the fifth most prominent location, behind Malaga, Alicante, Valencia and Madrid.